Margaret Huntley Last Updated On: August 1, 2023

COBRA Health Insurance for Difficult Times

COBRA health insurance refers to insurance that exists due to the Consolidated Omnibus Budget Reconciliation Act (COBRA)—a law that was put into place for those who lose their jobs or have reduced work hours. This coverage helps ensure that these people and their dependents still have health insurance coverage during those times. 

As you can imagine, this insurance can be a significant help, especially if you or your dependents rely on health insurance coverage and the job loss is unexpected. 

There’s a lot to understand about COBRA health insurance, and the amount of information can be overwhelming. That’s why we’ve created this guide to help you get a handle on what you need to know about COBRA health insurance. 

Keep reading for an in-depth (but easy to grasp) look into eligibility, coverage, and the costs of COBRA health insurance. 

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Table of Contents

How COBRA Health Insurance Works?

COBRA coverage gives you and your dependents access to healthcare coverage for a limited time after you lose your job, experience reduced work hours, or for another qualifying life event. Almost all employers are required to provide COBRA coverage if they have 20 or more employees. You should have received information on your COBRA coverage when you initially were enrolled in your employer healthcare coverage, but the general coverage involves the following:
  • After you lose your job, you have 60 days to decide whether or not you’ll want to use COBRA coverage. If you don’t decide or you turn it down, you’ll lose your healthcare coverage on the date your employer’s coverage for you ends.
  • COBRA coverage can last for 18 or 36 months, depending on what caused you to qualify for it.
  • COBRA coverage is the exact same coverage as you had under your employer, and it starts the day after your employer’s coverage ends. This ensures seamless coverage for you.
  • COBRA coverage depends on you paying your premiums or else coverage could be terminated. It also ends early if you land another job with healthcare coverage.
So, in short, COBRA health insurance is designed to ensure you and your dependents have the coverage you need should the unexpected happen and that you don’t experience any potentially devastating gaps in your health insurance coverage.  

Who Qualifies for COBRA Health Insurance?

Most employers are required to provide COBRA coverage to employees. Qualifying for COBRA coverage can be complicated, but here’s a general guide:
  • You must already be enrolled in employer-provided healthcare insurance on the day the qualifying event happens (such as losing your job) and the coverage must be effective on at least 50% of the employer’s business days in the past year.
  • The employer must still be offering a health plan to employees. If the company is going out of business or no longer offering health insurance to employees because they now have less than 20 employees, COBRA coverage may not apply.
  • You’ve experienced voluntary or involuntary job loss, or your work hours have been decreased to the point where you no longer receive healthcare coverage. Note that depending on the circumstances of your termination, you may not be eligible for COBRA coverage (for example, gross misconduct).
Understanding how you may qualify for COBRA coverage can give you peace of mind that your healthcare coverage won’t be interrupted.  

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How Much COBRA Coverage Costs?

Understanding the costs of COBRA coverage can help you make the best decision for you so that if you do lose your job, some of the stress can be alleviated by knowing that you at least have health insurance.

When you’re covered by employer health insurance, the employer pays for some or all of your healthcare premium. But when you lose your job, that cost falls to you alone. You may also have to pay an administrative fee on top of that.

The amount you’ll have to pay for COBRA insurance depends on the healthcare coverage you had at the time you became eligible for COBRA. Some plans are more expensive than others.

Getting a COBRA health insurance quote will help you understand exactly how much you’ll have to pay to continue that coverage. If you weren’t using much of your healthcare coverage in the first place, COBRA may not be the best choice for you and it may make more financial sense to look into personal health insurance plans and see the difference in cost/coverage.

How To Use COBRA Health Insurance?

You can use COBRA health insurance as you would have used your employer’s health insurance prior to your job loss or other qualifying events. We’ll dive deeper into the specifics of coverage below, but it functions as normal healthcare coverage and is designed to help ensure you’re not suddenly paying for prescription drugs and doctor’s visits wholly out of pocket. 

What COBRA Health Care Insurance Covers?

COBRA health insurance helps cover prescription drugs, dental treatments, vision care, and doctor’s visits, but does not include life insurance, hospital coverage, or disability insurance. It’s a continuation of the healthcare coverage you had from your employer. It’s important to note that COBRA health insurance can be terminated for a few different reasons:
  • You miss any premiums or don’t pay them on time
  • Your employer no longer offers healthcare insurance to employees
  • You begin to receive healthcare insurance through a new job
  • You become eligible for Medicare
Understanding that COBRA health insurance is a short-term solution is critical; it can’t be extended past the 18 or 36-month period (depending on how you qualify), so you should look into more long-term solutions to continue to receive healthcare coverage past its end date.  

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How to Apply For COBRA Health Care Insurance?

Should you become eligible for COBRA coverage, your employer or their health insurance provider will send you information outlining the details, eligibility, and how to use the insurance. If you have any questions about the coverage, you can contact your employer or the insurance provider directly. 

Is COBRA Health Insurance Coverage Right For You?

COBRA health insurance may not be right for everyone. It’s a stop-gap solution created to help you access affordable health care between jobs, but other short-term healthcare solutions may be more affordable or make more sense depending on your situation and healthcare needs.

The benefits of COBRA coverage are that it allows you to easily continue with the coverage you had before losing your job; you can stay with the same doctor, medications, and providers. 

The downsides of COBRA coverage are that it can be prohibitively expensive, it’s a short-term solution, and coverage could cease at any point depending on your previous employer’s situation. 

The best way for you to ensure you’re making the right choice is to get a variety of healthcare insurance quotes. This will allow you to compare both the coverage and costs and find the right fit for you and your dependents. 

Be sure to get a quote from us. We’ve curated a list of the very best COBRA insurance providers in the country and will match you with the top, most affordable provider for you. 

The main takeaway from all of this is that, for many, continued healthcare coverage is absolutely critical and COBRA coverage can be the helping hand you need between jobs. If you find yourself in a situation where you are temporary without life insurance, then you should at least consider COBRA.

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COBRA health insurance is a federally mandated program that provides you extended healthcare coverage after losing your job or another qualifying event. It gives you access to the healthcare coverage you received from your employer for 18 to 36 months, depending on the situation.

The cost of COBRA coverage depends on the cost of your employer’s healthcare plan. You would be responsible for paying the entirety of the premiums yourself and any other out-of-pocket costs. There could also be an administrative fee on top of that.

The most common way to qualify for COBRA coverage is voluntary or involuntary job loss. You may also qualify if your work hours were reduced to the point where you no longer qualify for your employer’s healthcare insurance.


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